November 10, 2025 • 38 mins
Chuck Zodda and Paul Lane discuss the Senate clearing the way toward ending the government shutdown. Big year for stocks and bonds to be tested by data deluge. The week the AI boom got a reality check on Wall Street. Corporate earnings were great this quarter. Wall Street is still not impressed. Trump suggests $2,000 payouts to Americans as he defends tariffs.
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Episode Transcript
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Speaker 1 (00:00):
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(01:05):
Zada and Paul Lane.
Speaker 2 (01:09):
Chuck Paul Tucker with you here.
Speaker 3 (01:10):
And again you take a look at what's on the
docked this week for US, and pretty quiet as far
as economic data and also earnings of which were now
through ninety one percent of the S and P five hundred,
So there's just not much juice left on that front.
But the big news and what we're gonna be watching
closely this week is do we end up getting a
(01:33):
resolution to reopen the federal government. Late last night, the Senate,
by a sixty to forty vote, did agree to take
up a House passed bill that effectively is, you know,
trying to make its way through Congress to reopen the
federal government. But we still have a couple other steps
(01:55):
that need to be done, including the final passage of
that legislation in the Senate, and then they are likely
to have some amendments relative to what the House passed,
and so it's going to get kicked back to the
House where they will have to then approve it. So,
as we sit here right now on Monday the tenth,
the federal government still not reopened, but all signs point
(02:16):
to the likelihood that it reopens in the coming days,
probably by the end of this week, which would still
mean that we have now seen the longest shutdown on record,
topping forty days and potentially ending up somewhere like that
forty three to forty five day window.
Speaker 1 (02:34):
Pall.
Speaker 4 (02:34):
Yeah, it's certainly something that is welcome to see some
progress here in terms of the two sides coming close
to reaching an agreement. Really, a lot of this was
due to some debates regarding some of the ACA extensions
of thirty billion dollars per year credits. It seems as
if on the American Care Affordable Care Acts that the
(02:58):
potential resolution for that is is to have the money
deposited into flexible savings accounts rather than sending the money
out to insurance companies. So, just to back up for
a second, these credits here are regarding offsetting the premium
costs for people who are not covered by a typical
(03:18):
employer sponsored plan on the healthcare side of things. This
was something that was a huge area of contention between
the Democrats and Republicans, and it appears as if this
potential workaround which would need to be ironed out a
little bit here because typically these flexible savings accounts are
for someone who is with an employer and covered by
and sport employer sponsor plan. On the healthcare side of things,
(03:41):
these may be the area that would receive some of
that funding rather than the insurance companies getting in general.
But again, still a lot to be done here. Obviously
the lead story here is some progress in this moving
its way. The House would be welcome news if that
is the case.
Speaker 3 (03:56):
So I think, look, the assumption I am going to
make is that it's very likely that the federal government
reopens later this week, and so I'm not really going
to discuss further machinations on that side of things. But
now we get to the question of Okay, once you're
through this, now we start to see if there was
(04:19):
any economic fallout as a result of it. And ultimately
that's gonna, you know, start to play out over the
next month or two. As we start to get the
government produced data coming back through, we'll start to see
what we're seeing on that side of things, and so
we'll get a little bit more accurate of a picture
as to where the US economy currently stands, just because
(04:41):
as of right now, it's been kind of hard to
tell what's going on. I mean, certainly we do again
have some private data sets that are out there that
are made available, but ultimately you have a standard cadence
of releases that you expect and that you get in particular,
you know, in a few key areas, most notably jobs, inflation,
(05:03):
retail sales, I think are the three big ones that
I tend to look at, and so getting back to
that regularly published data will help to give us a
little bit of clarity as to exactly where the US
economy stands and answer the question of, hey, was this
just a minor disruption, you know, to the US economy?
Was there, you know, relatively minimal damage and things, you know,
(05:25):
get back to normal pretty quickly, or because of the
length of it again the longest one ever, was there
some greater damage caused? And quite honestly, I don't know
exactly what we're going to see. I leaned towards it
still was probably short enough that it didn't cause any
major damage to the broader economy. But we're gonna have
to see how things evolve over the next couple of months,
(05:47):
and we'll see what we get on that side.
Speaker 4 (05:49):
If we were to get a resolution by the end
of this week in terms of future jobs reports and
things like that. Would we get Novembers or we're too
late because we're kind of in the middle of the
month where they tip to collect that survey data, right,
So would we just be on December As to when
we potentially would get info.
Speaker 3 (06:06):
Don't know, Yeah, don't know. What I do know is
what we will receive, like shortly after the reopening and authorization,
we are going to get the September jobs report them nice,
which they had basically finished but couldn't release because of
the shutdown, So we will know what happened in September.
October most likely to wash out. November I think is
(06:27):
a toss up, So it's very possible we don't get
any up to date jobs data until early January, which
then also raises the question of this bill to reopen
the federal government would only authorize funds through January thirtieth
or thirty first. There is a non zero chance that
(06:48):
we are back in this situation ninety days from now.
Speaker 4 (06:53):
We should just save some of our segments, right tucking
what are the.
Speaker 3 (07:00):
How do we like tape this so that we can
play the last month again in February?
Speaker 5 (07:08):
Can recording now yeah, do we still do we have tapes?
We're on YouTube, you can find it. Do they have
tapes that yeah, I'm pretty sure they got tapes. They
got tapes specifically, it's it's wonderful Beta Max. So I
think that when we look at this, don't know exactly
what the economic fallout is going to be. I lean
(07:29):
towards this shutdown probably still wasn't long enough to cause
any lasting damage, but was starting to get close to
that point. And if it had gone on another week
or two, I would have started to be concerned just
because then you're talking about, you know, nearly a million
workers missing potentially up to two months of pay. And yes,
(07:49):
like they will get that back pay, but ultimately, if
you're missing that much time, it can really cause some
problems that can you know, become local and regional in nature,
and then you know, does that become a national issue potentially.
So this is where we stand as we look at
the shutdown side of things. While we're still waiting for
(08:12):
a resolution. Air travel likely to continue to worsen because
of reduced schedules. The latest numbers that I saw from
over the weekend, we're pretty bad with on one day
over two thousand flights being canceled and upwards of seven
thousand being delayed, so about a quarter to a third
of all flights either delayed or canceled. To put that
(08:36):
in perspective, in the last couple of years, remember you
got three hundred and sixty five days out of any
particular year, and that means in you know, two years,
you've got about seven hundred days. Sunday was the seventy
second worst day for.
Speaker 3 (08:49):
Cancelations out of the last two years, which means again
kind of a top ten percent day for cancelations and delays.
Speaker 4 (08:58):
Not horrible, horrible, horrible, but.
Speaker 2 (08:59):
Not what you want to see.
Speaker 3 (09:02):
It certainly is inconvenience, and that inconvenience is going to
still be there the next few days because you still
don't have a full resolution on.
Speaker 4 (09:10):
This, and it seems like this was likely one of
the catalysts to kind of get this over the finish
line in terms of the resolution for the Republicans Democrats
to get the government reopened. And you it's something that
I know for a fact that you had alluded to
that twenty eighteen. It was a similar sort of cliff
that we reached where once you start having eighteen of
twenty two traffic controllers call out in Atlanta and the
(09:32):
problem spreads out wider, then you're gonna have a lot
of angry travelers and that will get hope. That's what's
happened here. You've got some of the folks in Washington
responding to this and trying to push this thing through.
Speaker 3 (09:45):
So again, expect to see some continued travel delays this week,
might even persist into early next week, just because look,
when you're trying to get equipment and crews from point
A to point B, if you've got delays that lasts
until this Friday, it might take until early next week
to get things squared away. It'll take a few days
after that. But it does look like again, assuming that
(10:07):
we get a deal later this week, which I think
is increasingly you know the case, it's very likely more
likely than not, unless we have some crazy weather, things
should be in pretty good shape for actual Thanksgiving travel,
you know, starting Monday, Tuesday of Thanksgiving Week's take a
quick break here. When we come back, we're talking about
(10:27):
the AI boom, that's how they pronounce it, and so
we'll talk about whether it got a reality check last week.
Speaker 1 (10:36):
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Speaker 5 (11:06):
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Speaker 3 (11:23):
All right. Wall Street Journal has a piece it's titled
the Week the AI Boom got a reality check on
Wall Street And we actually sent Tucker down to Wall
Street with a microphone to go and get a little
bit of audio of what was going on there. And
so he's going to play that for you right now.
Speaker 4 (11:41):
And Boom goes to Dynamite.
Speaker 3 (11:43):
That's exactly what happened there. So here's the thing. The
last week and a half couple weeks has been not
great for tech stocks. In fact, it's been quite bad
for a number of them. If we look at one
week performance in video even with a re bound today
still down about six percent, Oracle down about six, Palenteer
(12:03):
down about eight, am D down about five, Tessel down
about six, Qualcom down five, Salesforce down nine. You know,
it's it's been kind of gross out there. And remember
this is happening with like a two to three percent
rebound in a lot of these prices today. So I
think the question is, and it's the same question that
(12:23):
always matters in investing, is what we saw the start
of a new longer term shift? Is what I'm seeing
something permanent or is it temporary? And you know, ultimately
it's going to be determined by two things as it
relates to these tech companies and artificial intelligence. The first
(12:46):
thing is going to be, hey, can you continue to
grow your earnings in such a way that all that
CAPEX doesn't matter? And the second piece is, well, if
you can't, what does the rest of your business you know,
look like then in terms of its growth. I maintain
(13:08):
I don't know how these questions are going to be resolved,
but twenty six and twenty seven are going to be
the years in which these are answered. You know, all
these companies are trying to be like, hey, our twenty
thirty revenue is gonna be this and that, and it's like, guys,
don't give me five year revenue projections. That's like the
guy who walks into a presentation with a bunch of
vcs being like, well, the total available market for TAM,
(13:29):
the TAM for people who exercises two hundred million people,
and if we get just one percent of that, it's
like okay, Like you can take that. It's not even
worth the paper it's printed on, Like go just flush it,
like call it a day. So tell me next year, Hey,
we're investing five hundred billion dollars in AI data centers.
(13:51):
What kind of revenue you're gonna be able to get
from that? Because that depreciation is gonna start hitting your
financial statements pretty heavy in about twelve to eighteen months.
Speaker 4 (14:00):
Be able to deal with That's that's exactly the story here,
and it's going to continue to be publicized over the
course of the next six to twelve months. Ultimately there
will be become a breaking point one way or another
where companies, like you said, are going to have to
point to what type of revenue growth are they going
to get from it? Mark Zuckerberg had a quote on
this whole subject of just the front loading of investment
(14:21):
of building out capacity, where he basically mentioned aggressivelly front
loading building capacity for computing demand is preparing for the
most optimistic case with AI, and if for some reason
that doesn't formalize, then the slow building now of new
infrastructure will grow into it and that ladder sentiment of okay,
(14:42):
if it doesn't hit our most optimistic use case here,
then we've kind of built out for new infrastructure. That
would be kind of the worst case scenario for markets.
And when you'd see a lot of bludgeoning on some
of these companies if for some reason of the course
of the next twelve to eighteen months, there was any
indicator that the cart was truly put in front of
(15:03):
the horse and that all of this capital expenditures are
for something that's going to take longer to materialize in
terms of revenue impact. That's that's the story here, and
I don't know the answer to it.
Speaker 3 (15:14):
The and and look, I've said this before. I understand
the financial incentives for Zuck and not just Zuck, but
for you know, Sadni Nadella and Sundaprachai and like you
go through the whole list of them. I get it.
It's okay. I could spend two hundred and fifty billion
dollars over the next five years, and if this works out,
(15:36):
I have a multi trillion dollar opportunity in front of me.
If it doesn't work out, stock price is gonna get
hit pretty hard. But I'm not gonna go out of business.
Like it's not you know, something that ends my company.
Speaker 1 (15:51):
And so.
Speaker 3 (15:53):
Yeah, I'll take that chance. Like that, that's how they're
thinking about it. For someone like Sam Altman, it's even
like more clear. It's like, hey, I don't have anything
right now, and this is my chance. And if I
can get all these other people to commit to giving
me their money so that this could work out, I
could be a multibility you know out a four hundred
(16:13):
billionaire and this and that, Like.
Speaker 4 (16:15):
Yeah, it doesn't have any he has a lot, but
he's got to keep it going, keep the momentum going.
Speaker 3 (16:20):
Most of the skin in the game is not his,
Like it's ultimately, if it doesn't work, Sam goes back
to being the same person he was before all this.
You know, it's like it's not his money that they
don't have the revenue in order to spend this money,
so it's not their own. So like you understand the
financial incentives for all these people, and objectively it's the
(16:43):
right move for all of them to make, but we
can still look at it and be like, ooh, this
might not go well. And this is even before you
get to the fact that these are not people that
have proven they can ethically steward this kind of power.
(17:04):
And it's pretty clear with how poorly these this new
technology is being shepherd did in terms of, you know,
what they're finding important in terms of how they're building
it now. I mean again you talk about like the
AI erotica stuff that they started talking about a couple
of weeks ago, You've got multiple pieces that are out
(17:27):
now that quite honestly, if you haven't read them, just
like Google around, they're out there on cases where people
and kids have been told to know uncertain terms that
they should take their own lives by these artificial intelligence platforms,
And quite honestly, like the fact that there aren't congressional
hearings about this is kind of ridiculous. That like technology
(17:49):
is actively telling people to hurt themselves and no one
seems to care is kind of wild to me. So
I'm just not sure that these are the people that
you want shepherding something with this kind of power, because
they don't really seem to care about humans very much,
you know, like they just don't. But it is what
(18:11):
it is. So we'll know in the next two years
whether AI is going to work out as you know,
a viable, large scale business with this kind of investment
or not. I think it's very likely that we continue
to use more and more AI in our daily lives.
But we use the internet a whole lot more than
we did twenty five years ago. And a lot of
(18:32):
the companies that started the Internet they're no longer here
because they spent too much money and it didn't work
in that in those finances, in those terms. So that's
kind of where we are. Let's see other things that
I do want to get to. We're ninety one percent
through corporate earnings for Q three now, and the Q
(18:52):
three earnings.
Speaker 4 (18:53):
Are really really good.
Speaker 3 (18:57):
But why are we not seeing individual companies being rewarded
the same way that we have been when earnings are
normally good? Like, what have we actually been seeing in
response to that? Let's take a quick break, and then
when we come back, we're going to cover this Q
three earning season, which has been really good, but for
(19:17):
the average company it hasn't really meant really good things
for their stock price. Why the divergence. We'll discuss after this.
Speaker 1 (19:41):
Like us on Facebook and follow us on Twitter at
TFE show. Breaking business news is always first right here
on the Financial Exchange Radio Network. Time now for Wall Street.
Watch a complete look and what's moving markets so far
today Right here on the Financial Exchange Radio.
Speaker 5 (20:00):
Markets are rebounding and rallying after seeing the tech having
NASDAK log its worst week since April. Sentiment was lifted
last night after Senate lawmakers cleared a major hurdle toward
potentially ending the historic government shutdown. Right now, the Dow
is up nearly three tenths of one percent, or one
(20:22):
hundred and twenty six points. S and P five hundred
up one point one percent or seventy nine points higher,
Nasdaq up just over two percent higher four hundred and
sixty six points, RUSSED two thousand, up eight percent. Tenure
Treasury yield is currently up one basis point at four
point one zero four percent. In crude oil dipping into
(20:46):
negative territory training at fifty nine dollars and sixty seven
cents a barrel, well after initially opening the day higher.
Airline stocks, including American United and Delta Airlines, are now
dipping into negative territory. Meanwhile, Taiwan Semiconductor saw its sales
climb last month at the slowest pace since February twenty
twenty four, but remained in double digits, that stock rising
(21:09):
by three percent. Elsewhere, drugmaker Pfizer agreed to buy weight
loss startup met Sarah in a deal that could be
worth more than ten billion dollars. Met Sarah's stock is
falling fifteen percent, while Pfizer shares are down about half
eight percent. Shares in video sharing platform Rumble surging nearly
ten percent after the company secured at one hundred million
(21:31):
dollar advertising commitment from Tether, while also announcing the deal
to buy German AI firm Northern Data for about seven
hundred and sixty seven million dollars. In Stackhart edging higher
after the grocery delivery company posted stronger than expected quarterly
results after its eleven percent tumble last week over high
valuation concerns. Pall Andeer shares rebounding eight percent today and
(21:55):
after today's closing bell, we'll see earnings from Core Weave
and oxid Dental Petroleum. I'm Tucker Silva, and that is
Wall Street Watch.
Speaker 3 (22:06):
Okay, let's get to earnings. I have some other things
that are on my mind, but let's talk a little
bit a bit about earnings, just because I did tease it.
So we're through ninety one percent of corporate earning season
for the S and P five hundred, and according to
fact Set, who is a data aggregator, ninety percent of
those companies have reported, and the year over year earnings
(22:27):
growth rate for the S and P five hundred and
thirteen point one percent, which is pretty darn toutin like
that is solid. Despite that the S and P five
hundred has risen one point three percent since the kickoff
of earning season, what gives Paul?
Speaker 4 (22:44):
Ultimately, it's to me, it's evaluation story. You had a
market that has run up significantly this year, and while
using ratios like price to earnings and you know, press
to booker press the sales, they're not great short term predictors.
It does seem like that the reaction from investors and
analysts out there is when you see these types of
(23:07):
earnings numbers that we're seeing for Q three it was
more and this is quoting directly from the Wall Street
Journal piece, a sigh of relief than actually a positive
surprise that provides more upward mobility to some of these stocks.
We've talked about it a lot on this program before,
but whatever valuation metric you want to look at, stocks
(23:28):
are really pricey right now. And the numbers that we're
seeing here in the current quarter earning season being reported
because we've seen such a run up this year in
terms of stock growth and valuations of the tech companies,
it's really just almost hey, few they they actually are growing,
rather than oh, this is tremendous, the stock value should
(23:49):
increase even more. It's sort of my short takeaway.
Speaker 3 (23:53):
When we look at the S and P five hundred
and this is I want to look at this in
two different areas. First, talk about just profit growth, so
if you will get year over your profit growth, and
I have this broken out by industry, No surprise, tech
has the greatest profit growth out of any of the
eleven S and P five hundred sectors for this quarter
twenty seven point one percent profit growth, which is I
(24:16):
believe the technical term is enfuego. It's good financials with
all the trading that's going on, all the M and
A activity, this and that of twenty three percent as
far as their earnings, utilities twenty three point two percent.
Kind of surprising. But then when you think about all
these data centers and this and that and gee, like,
if you're an American who's kind of upset about your
(24:36):
electricity price, you're sitting there going like, oh, utilities, you know,
their earnings were twenty three percent year over year, Man,
so did my electric bill?
Speaker 2 (24:43):
That doesn't feel so hot.
Speaker 3 (24:45):
Granted the average electric bill is not up that much,
but you're still kind of like, like, what gives materials
earnings up twenty percent year over year, industrials up fifteen.
Then you get to the ones that are moving more slowly,
consumer discretionary up e eight percent. Now, remember when we
talk about consumer discretionary, the companies that have an outsize
(25:06):
impact there are Amazon and Tesla, So you know you
do have to worry about like what concentration in some
of these sectors tells you. Real estate earnings up six
point one percent, healthcare five point two, consumer staples down
point one percent, energy down half a percent, communication services
down seven point one These are the earnings year over year.
(25:28):
So you look at this and you're like, okay, it's
again no surprise, like tech's been what's been growing fastest,
and you get it there. The piece that is really
interesting to me is what's going on in terms of
revenue growth because obviously, look, tech revenue is up fifteen
point four percent year over year. It's the fastest growing
(25:49):
even by revenue. Healthcare is next to ten point three.
But remember healthcare profits only grew at five point two
percent year over year, so there's, you know, a margin
issue that's happening there. Communications services revenue up ten point
one percent. Remember earnings were down. There's there's a problem there,
but really it's specific to Amazon and just how some
things were realized. Financial is up nine point four percent
(26:10):
for revenue, and everything else is basically up one to
seven and a half percent revenue wise. So you look
at the story here and it's basically for tech and
financials and utilities, margins are expanding and revenue is growing
just fine. For everything else, revenue is growing, but margins
(26:33):
are feeling some pressure there. And this gets it what
we're seeing today in markets, specifically in my opinion, which
is look you've got the idea that hey, the US
government's going to reopen, and so you've got, you know,
this exuberance that's going forth right now in markets today,
S and P five hundred is up one point oh
seven percent, like okay, like you know, the US is back, baby,
(26:57):
Like we're back. The S and P five hundred equal
weight is actually down point one five percent right now.
Investors might want to own US stocks, but they don't
want to own the US economy. Like that's the message
(27:18):
that I get from today. They want to buy tech
and all that stuff. Investors are not interested in staples,
real estate, energy, industrials, all that stuff that actually makes
the economy work. They don't want to own. And by
the way, if you go and take a look this
year at what's going on in markets aside from you know, utilities,
(27:43):
which is the outlier because of its you know, data
center adjacent position that it runs. In energy this year
up about seven percent, lagging the broader index. Real estate
up three percent, lagging the broader index, Consumer staples down
half a percent, materials up the three percent, healthcare OP seven,
consumer discretionary of five, like the stuff that actually makes
(28:06):
the economy hum isn't humming in the market this.
Speaker 4 (28:10):
Year, Paul, relative to what you know, the tech sector
and some of the other big performance.
Speaker 3 (28:15):
Yeah, the stuff that's cranking again this year, it is
tech communication services, which is really basically.
Speaker 4 (28:20):
Amazon and Google.
Speaker 3 (28:22):
Uh. And then you've got utilities, which is again adjacent.
We've talked about that and why that's the case, and
so you kind of look at it, it's like, yeah, like
even even the stock market is kind of k shaped, right.
Speaker 4 (28:37):
Yeah, that's a fair assessment.
Speaker 3 (28:39):
You know, like even the stock market, you got tech
and all this stuff flying, and the other half of
stuff is just kind of treading water up very modestly.
And I think it's pretty representative of what we're seeing
this year broadly in the economy. To take a quick break,
when we come back, President Trump over the weekend put
out a social media post saying that he wanted to
(29:00):
make two thousand dollars payments from tariff revenue to individuals.
We will discuss after.
Speaker 1 (29:07):
This breaking business news as it happens only here on
the Financial Exchange Radio Network. The Financial Exchange streams live
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Speaker 3 (29:38):
All Right, so over the weekend, President Trump posted on
truth Social quote people that are against tariffs are fools.
We're now the richest most respected country in the world
with almost no inflation and a record stock market price.
A dividend of at least two thousand dollars a person,
not including high income people, will be paid to everyone.
(29:59):
So this is obviously like we're getting back to stimulus
checks now for the economy, which again, now I'm really
starting to feel like we're back in like twenty twenty one. Now.
I mean, it's just, you know, give me a little
bit of deja vu here on this. And here's the thing.
If you take in two hundred billion dollars in tariff
(30:22):
revenue and then pay out two thousand dollars to one
hundred million people, you effectively have not made any net
revenue change to the federal government. On top of this,
if you continue to you know, run six to eight
percent annual deficits, you continue to you know, grow the
deficit year over year, both relative to GDP and in
(30:45):
you know, nominal terms. And so I think, a, I'm
really just not sure that there's a ton of appetite
out there right now for two thousand dollars stimulus checks
to be like handed out. I just don't know. And
I think the other piece is, Okay, if all the
tariff revenue is just going to end up being taken
(31:07):
and given back to people, then what did we actually.
Speaker 2 (31:14):
Do here?
Speaker 4 (31:17):
I'm right with you. It seems like you have a
couple risks that could come from this one potentially creating
kind of more inflationary pressure by giving one hundred million people.
Did you just ballpark that number because it's just it
was yeah, because it was unclear. It just said like
no high incomers. But I wasn't sure if there had
been a number sort of projected out there. But yeah,
(31:38):
that hypothetically that same exercise, you're putting two thousand dollars
in everyone's pocket. We know what happened last time with
the COVID stimulus checks. Those certainly allowed for a lot
of people to spend more freely than they would have normally.
So that's one aspect of things. And the second impact
impact is my view on terrorists, if they could go
down to pay down some of our debt, that to
(32:00):
me would be encouraging. It's something that certainly I could
get behind. From a fiscal monetary perspective, you could argue
as to how much of a deen it makes when
you're running six to eight percent deficit each year and
it's two trillion dollars, But hey, two to three hundred
billion to pay that off is better than nothing. I
would like that more so to go into that direction
than a stimulative effort to individuals out there.
Speaker 3 (32:22):
No one wants to be serious about the deficit. Yeah,
it's been like the last time anyone was serious about
the deficit. You got to go back almost thirty years.
I mean you're talking nineteen eighties, nineteen nineties, when again
members of both parties voted against kind of like their
own like platforms and interests. People forget like Reagan raised taxes,
(32:44):
Bush One raised taxes, Clinton cut spending. Those are not
normal things from the respective parties that you're talking either side. Yeah,
and they ultimately did it because they know it was
the right thing to do. Now it's just well, you know,
here's you know, the this and spend on that and
cut this and cut It's like, okay, Like the reason
(33:05):
why we're here is because no one wants to do
the hard stuff. And until proven otherwise, that's kind of
the case.
Speaker 5 (33:12):
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Speaker 3 (34:24):
I got a bone to pick with Google.
Speaker 2 (34:26):
Oh yesterday, at four seventeen pm Eastern time, I received
an email from YouTube TV, who is owned by Google.
Speaker 3 (34:40):
In case you didn't know, Hi, Chuck, who they know
my name?
Speaker 4 (34:45):
Wow?
Speaker 3 (34:47):
Wonderful they spelled it right too. We have been working
in good faith to negotiate a deal with Disney that
pays them fairly for their content and returns their programming.
Speaker 2 (34:55):
To YouTube TV.
Speaker 4 (34:56):
Good for you.
Speaker 3 (34:57):
We know it's been disappointing to lose Disney content. We
want you to know that we deeply appreciate your patience.
Oh thanks, put me on hold. In light of the disruption,
we're offering our subscribers to twenty dollar credit. It's great. Like,
I'm just I'm gonna get twenty dollars off my next bill.
Over the next few days, you will receive a follow
up email with instructions for how to redeem your twenty
dollars credit for YouTube TV. So you bunched like greedy
(35:22):
little like gremlins.
Speaker 4 (35:24):
Like, what the heck?
Speaker 2 (35:25):
You say?
Speaker 3 (35:26):
You want to give me a credit? But I got
to freaking opt into the credit. That's right, because you
just want to be like, oh, someone out there isn't
gonna figure out how to probably because hey, maybe they're
not the most tech savvy and maybe their kids set
this up for them, and so they're gonna miss out
on the twenty dollars credit because you need that twenty
dollars to fund some data center of your buildings that's
(35:47):
gonna eat all of our electricity and water. So, like,
my goodness, now here's the thing. To anyone listening who
subscribes to YouTube TV. Go onto TV dot YouTube dot com,
click on your like sign in, and then go to
the settings menu. It's in the top right.
Speaker 5 (36:04):
Somebody steps already exactly, it's in the top right.
Speaker 3 (36:06):
Then once you're in the settings, men, you click on
the updates selection and then you can redeem your credit there.
Speaker 5 (36:12):
Like that's simple, But to go through all those steps
is aggravating it. A lot of people are just gonna
punt on.
Speaker 3 (36:18):
Google's gonna end up making millions of dollars because they
made the like credit claiming process too difficult. So like
this again. It sometimes I like when we talk about like,
you know, greedflation in this and that, I like to
poo pooh because I'm like Look, greed didn't cause inflation.
Companies are always greedy, and like there's not always you know,
(36:38):
high inflation. But when someone says, hey, we're not giving
you the product you signed up for and we want
to give you a credit, and then they make you
go through like a four menu screen to go and
authorize the credit, that's greedy and it sucks, and yeah,
just do it. I don't like it. Just Just give
me the freaking credits.
Speaker 5 (36:59):
Just discount everybody you know, like I to it.
Speaker 2 (37:03):
I just don't get it.
Speaker 4 (37:05):
Not everyone's gonna want that Zucker they got hopped in.
Speaker 3 (37:08):
This is where you get like the social media influencers.
I was born tough and that's why not only did
I opt out, I emailed YouTube to see if they
charged me twenty dollars extra this month.
Speaker 4 (37:18):
So they're pushing back against Disney and all the channels
that go underneath that in terms of what they want
to charge in the upcoming cycle to be on YouTube TV. Basically,
they're they're claiming it.
Speaker 3 (37:29):
Look, they can fight it out, like it's fine, Like
I understand it, Like I don't have a problem there.
But if you're gonna say, hey, you're not getting the
product that you signed up for, and here's a credit.
Don't make me sign up for the credit.
Speaker 4 (37:40):
You don't.
Speaker 2 (37:41):
You don't make me.
Speaker 3 (37:41):
Sign up for YouTube tv every month, right because you
want the recurring subscription revenue. So don't make me sign
up for the credit. Just give me the freaking twenty dollars,
you greedy little like like Gerbils, Like what are you doing?
You people?
Speaker 4 (37:59):
So no money, no foot for you tonight. Basically unless
they get during the day, bed.
Speaker 3 (38:03):
Before then anyways, unless it's the pats like I do
not make it past eight thirty. So it's it's fine.
Speaker 4 (38:08):
But they're number four now, they got ten million subscribers
YouTube They're they're pretty serious player YouTube TV.
Speaker 5 (38:13):
They're not tiny, Yeah, Tucker, we supposed to have some,
but there it is. Nope, Yeah, they're it's just you know,
being stupid.
Speaker 4 (38:19):
Okay, got it.
Speaker 3 (38:20):
I thought we were done. We're gonna take a quick break.
Now we're done for the hour and we'll be back
Speaker 2 (38:26):
In just a bit.
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(01:05):
Zada and Paul Lane.
Speaker 2 (01:09):
Chuck Paul Tucker with you here.
Speaker 3 (01:10):
And again you take a look at what's on the
docked this week for US, and pretty quiet as far
as economic data and also earnings of which were now
through ninety one percent of the S and P five hundred,
So there's just not much juice left on that front.
But the big news and what we're gonna be watching
closely this week is do we end up getting a
(01:33):
resolution to reopen the federal government. Late last night, the Senate,
by a sixty to forty vote, did agree to take
up a House passed bill that effectively is, you know,
trying to make its way through Congress to reopen the
federal government. But we still have a couple other steps
(01:55):
that need to be done, including the final passage of
that legislation in the Senate, and then they are likely
to have some amendments relative to what the House passed,
and so it's going to get kicked back to the
House where they will have to then approve it. So,
as we sit here right now on Monday the tenth,
the federal government still not reopened, but all signs point
(02:16):
to the likelihood that it reopens in the coming days,
probably by the end of this week, which would still
mean that we have now seen the longest shutdown on record,
topping forty days and potentially ending up somewhere like that
forty three to forty five day window.
Speaker 1 (02:34):
Pall.
Speaker 4 (02:34):
Yeah, it's certainly something that is welcome to see some
progress here in terms of the two sides coming close
to reaching an agreement. Really, a lot of this was
due to some debates regarding some of the ACA extensions
of thirty billion dollars per year credits. It seems as
if on the American Care Affordable Care Acts that the
(02:58):
potential resolution for that is is to have the money
deposited into flexible savings accounts rather than sending the money
out to insurance companies. So, just to back up for
a second, these credits here are regarding offsetting the premium
costs for people who are not covered by a typical
(03:18):
employer sponsored plan on the healthcare side of things. This
was something that was a huge area of contention between
the Democrats and Republicans, and it appears as if this
potential workaround which would need to be ironed out a
little bit here because typically these flexible savings accounts are
for someone who is with an employer and covered by
and sport employer sponsor plan. On the healthcare side of things,
(03:41):
these may be the area that would receive some of
that funding rather than the insurance companies getting in general.
But again, still a lot to be done here. Obviously
the lead story here is some progress in this moving
its way. The House would be welcome news if that
is the case.
Speaker 3 (03:56):
So I think, look, the assumption I am going to
make is that it's very likely that the federal government
reopens later this week, and so I'm not really going
to discuss further machinations on that side of things. But
now we get to the question of Okay, once you're
through this, now we start to see if there was
(04:19):
any economic fallout as a result of it. And ultimately
that's gonna, you know, start to play out over the
next month or two. As we start to get the
government produced data coming back through, we'll start to see
what we're seeing on that side of things, and so
we'll get a little bit more accurate of a picture
as to where the US economy currently stands, just because
(04:41):
as of right now, it's been kind of hard to
tell what's going on. I mean, certainly we do again
have some private data sets that are out there that
are made available, but ultimately you have a standard cadence
of releases that you expect and that you get in particular,
you know, in a few key areas, most notably jobs, inflation,
(05:03):
retail sales, I think are the three big ones that
I tend to look at, and so getting back to
that regularly published data will help to give us a
little bit of clarity as to exactly where the US
economy stands and answer the question of, hey, was this
just a minor disruption, you know, to the US economy?
Was there, you know, relatively minimal damage and things, you know,
(05:25):
get back to normal pretty quickly, or because of the
length of it again the longest one ever, was there
some greater damage caused? And quite honestly, I don't know
exactly what we're going to see. I leaned towards it
still was probably short enough that it didn't cause any
major damage to the broader economy. But we're gonna have
to see how things evolve over the next couple of months,
(05:47):
and we'll see what we get on that side.
Speaker 4 (05:49):
If we were to get a resolution by the end
of this week in terms of future jobs reports and
things like that. Would we get Novembers or we're too
late because we're kind of in the middle of the
month where they tip to collect that survey data, right,
So would we just be on December As to when
we potentially would get info.
Speaker 3 (06:06):
Don't know, Yeah, don't know. What I do know is
what we will receive, like shortly after the reopening and authorization,
we are going to get the September jobs report them nice,
which they had basically finished but couldn't release because of
the shutdown, So we will know what happened in September.
October most likely to wash out. November I think is
(06:27):
a toss up, So it's very possible we don't get
any up to date jobs data until early January, which
then also raises the question of this bill to reopen
the federal government would only authorize funds through January thirtieth
or thirty first. There is a non zero chance that
(06:48):
we are back in this situation ninety days from now.
Speaker 4 (06:53):
We should just save some of our segments, right tucking
what are the.
Speaker 3 (07:00):
How do we like tape this so that we can
play the last month again in February?
Speaker 5 (07:08):
Can recording now yeah, do we still do we have tapes?
We're on YouTube, you can find it. Do they have
tapes that yeah, I'm pretty sure they got tapes. They
got tapes specifically, it's it's wonderful Beta Max. So I
think that when we look at this, don't know exactly
what the economic fallout is going to be. I lean
(07:29):
towards this shutdown probably still wasn't long enough to cause
any lasting damage, but was starting to get close to
that point. And if it had gone on another week
or two, I would have started to be concerned just
because then you're talking about, you know, nearly a million
workers missing potentially up to two months of pay. And yes,
(07:49):
like they will get that back pay, but ultimately, if
you're missing that much time, it can really cause some
problems that can you know, become local and regional in nature,
and then you know, does that become a national issue potentially.
So this is where we stand as we look at
the shutdown side of things. While we're still waiting for
(08:12):
a resolution. Air travel likely to continue to worsen because
of reduced schedules. The latest numbers that I saw from
over the weekend, we're pretty bad with on one day
over two thousand flights being canceled and upwards of seven
thousand being delayed, so about a quarter to a third
of all flights either delayed or canceled. To put that
(08:36):
in perspective, in the last couple of years, remember you
got three hundred and sixty five days out of any
particular year, and that means in you know, two years,
you've got about seven hundred days. Sunday was the seventy
second worst day for.
Speaker 3 (08:49):
Cancelations out of the last two years, which means again
kind of a top ten percent day for cancelations and delays.
Speaker 4 (08:58):
Not horrible, horrible, horrible, but.
Speaker 2 (08:59):
Not what you want to see.
Speaker 3 (09:02):
It certainly is inconvenience, and that inconvenience is going to
still be there the next few days because you still
don't have a full resolution on.
Speaker 4 (09:10):
This, and it seems like this was likely one of
the catalysts to kind of get this over the finish
line in terms of the resolution for the Republicans Democrats
to get the government reopened. And you it's something that
I know for a fact that you had alluded to
that twenty eighteen. It was a similar sort of cliff
that we reached where once you start having eighteen of
twenty two traffic controllers call out in Atlanta and the
(09:32):
problem spreads out wider, then you're gonna have a lot
of angry travelers and that will get hope. That's what's
happened here. You've got some of the folks in Washington
responding to this and trying to push this thing through.
Speaker 3 (09:45):
So again, expect to see some continued travel delays this week,
might even persist into early next week, just because look,
when you're trying to get equipment and crews from point
A to point B, if you've got delays that lasts
until this Friday, it might take until early next week
to get things squared away. It'll take a few days
after that. But it does look like again, assuming that
(10:07):
we get a deal later this week, which I think
is increasingly you know the case, it's very likely more
likely than not, unless we have some crazy weather, things
should be in pretty good shape for actual Thanksgiving travel,
you know, starting Monday, Tuesday of Thanksgiving Week's take a
quick break here. When we come back, we're talking about
(10:27):
the AI boom, that's how they pronounce it, and so
we'll talk about whether it got a reality check last week.
Speaker 1 (10:36):
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(10:58):
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Speaker 5 (11:06):
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Thank you, veterans for all you've done.
Speaker 3 (11:23):
All right. Wall Street Journal has a piece it's titled
the Week the AI Boom got a reality check on
Wall Street And we actually sent Tucker down to Wall
Street with a microphone to go and get a little
bit of audio of what was going on there. And
so he's going to play that for you right now.
Speaker 4 (11:41):
And Boom goes to Dynamite.
Speaker 3 (11:43):
That's exactly what happened there. So here's the thing. The
last week and a half couple weeks has been not
great for tech stocks. In fact, it's been quite bad
for a number of them. If we look at one
week performance in video even with a re bound today
still down about six percent, Oracle down about six, Palenteer
(12:03):
down about eight, am D down about five, Tessel down
about six, Qualcom down five, Salesforce down nine. You know,
it's it's been kind of gross out there. And remember
this is happening with like a two to three percent
rebound in a lot of these prices today. So I
think the question is, and it's the same question that
(12:23):
always matters in investing, is what we saw the start
of a new longer term shift? Is what I'm seeing
something permanent or is it temporary? And you know, ultimately
it's going to be determined by two things as it
relates to these tech companies and artificial intelligence. The first
(12:46):
thing is going to be, hey, can you continue to
grow your earnings in such a way that all that
CAPEX doesn't matter? And the second piece is, well, if
you can't, what does the rest of your business you know,
look like then in terms of its growth. I maintain
(13:08):
I don't know how these questions are going to be resolved,
but twenty six and twenty seven are going to be
the years in which these are answered. You know, all
these companies are trying to be like, hey, our twenty
thirty revenue is gonna be this and that, and it's like, guys,
don't give me five year revenue projections. That's like the
guy who walks into a presentation with a bunch of
vcs being like, well, the total available market for TAM,
(13:29):
the TAM for people who exercises two hundred million people,
and if we get just one percent of that, it's
like okay, Like you can take that. It's not even
worth the paper it's printed on, Like go just flush it,
like call it a day. So tell me next year, Hey,
we're investing five hundred billion dollars in AI data centers.
(13:51):
What kind of revenue you're gonna be able to get
from that? Because that depreciation is gonna start hitting your
financial statements pretty heavy in about twelve to eighteen months.
Speaker 4 (14:00):
Be able to deal with That's that's exactly the story here,
and it's going to continue to be publicized over the
course of the next six to twelve months. Ultimately there
will be become a breaking point one way or another
where companies, like you said, are going to have to
point to what type of revenue growth are they going
to get from it? Mark Zuckerberg had a quote on
this whole subject of just the front loading of investment
(14:21):
of building out capacity, where he basically mentioned aggressivelly front
loading building capacity for computing demand is preparing for the
most optimistic case with AI, and if for some reason
that doesn't formalize, then the slow building now of new
infrastructure will grow into it and that ladder sentiment of okay,
(14:42):
if it doesn't hit our most optimistic use case here,
then we've kind of built out for new infrastructure. That
would be kind of the worst case scenario for markets.
And when you'd see a lot of bludgeoning on some
of these companies if for some reason of the course
of the next twelve to eighteen months, there was any
indicator that the cart was truly put in front of
(15:03):
the horse and that all of this capital expenditures are
for something that's going to take longer to materialize in
terms of revenue impact. That's that's the story here, and
I don't know the answer to it.
Speaker 3 (15:14):
The and and look, I've said this before. I understand
the financial incentives for Zuck and not just Zuck, but
for you know, Sadni Nadella and Sundaprachai and like you
go through the whole list of them. I get it.
It's okay. I could spend two hundred and fifty billion
dollars over the next five years, and if this works out,
(15:36):
I have a multi trillion dollar opportunity in front of me.
If it doesn't work out, stock price is gonna get
hit pretty hard. But I'm not gonna go out of business.
Like it's not you know, something that ends my company.
Speaker 1 (15:51):
And so.
Speaker 3 (15:53):
Yeah, I'll take that chance. Like that, that's how they're
thinking about it. For someone like Sam Altman, it's even
like more clear. It's like, hey, I don't have anything
right now, and this is my chance. And if I
can get all these other people to commit to giving
me their money so that this could work out, I
could be a multibility you know out a four hundred
(16:13):
billionaire and this and that, Like.
Speaker 4 (16:15):
Yeah, it doesn't have any he has a lot, but
he's got to keep it going, keep the momentum going.
Speaker 3 (16:20):
Most of the skin in the game is not his,
Like it's ultimately, if it doesn't work, Sam goes back
to being the same person he was before all this.
You know, it's like it's not his money that they
don't have the revenue in order to spend this money,
so it's not their own. So like you understand the
financial incentives for all these people, and objectively it's the
(16:43):
right move for all of them to make, but we
can still look at it and be like, ooh, this
might not go well. And this is even before you
get to the fact that these are not people that
have proven they can ethically steward this kind of power.
(17:04):
And it's pretty clear with how poorly these this new
technology is being shepherd did in terms of, you know,
what they're finding important in terms of how they're building
it now. I mean again you talk about like the
AI erotica stuff that they started talking about a couple
of weeks ago, You've got multiple pieces that are out
(17:27):
now that quite honestly, if you haven't read them, just
like Google around, they're out there on cases where people
and kids have been told to know uncertain terms that
they should take their own lives by these artificial intelligence platforms,
And quite honestly, like the fact that there aren't congressional
hearings about this is kind of ridiculous. That like technology
(17:49):
is actively telling people to hurt themselves and no one
seems to care is kind of wild to me. So
I'm just not sure that these are the people that
you want shepherding something with this kind of power, because
they don't really seem to care about humans very much,
you know, like they just don't. But it is what
(18:11):
it is. So we'll know in the next two years
whether AI is going to work out as you know,
a viable, large scale business with this kind of investment
or not. I think it's very likely that we continue
to use more and more AI in our daily lives.
But we use the internet a whole lot more than
we did twenty five years ago. And a lot of
(18:32):
the companies that started the Internet they're no longer here
because they spent too much money and it didn't work
in that in those finances, in those terms. So that's
kind of where we are. Let's see other things that
I do want to get to. We're ninety one percent
through corporate earnings for Q three now, and the Q
(18:52):
three earnings.
Speaker 4 (18:53):
Are really really good.
Speaker 3 (18:57):
But why are we not seeing individual companies being rewarded
the same way that we have been when earnings are
normally good? Like, what have we actually been seeing in
response to that? Let's take a quick break, and then
when we come back, we're going to cover this Q
three earning season, which has been really good, but for
(19:17):
the average company it hasn't really meant really good things
for their stock price. Why the divergence. We'll discuss after this.
Speaker 1 (19:41):
Like us on Facebook and follow us on Twitter at
TFE show. Breaking business news is always first right here
on the Financial Exchange Radio Network. Time now for Wall Street.
Watch a complete look and what's moving markets so far
today Right here on the Financial Exchange Radio.
Speaker 5 (20:00):
Markets are rebounding and rallying after seeing the tech having
NASDAK log its worst week since April. Sentiment was lifted
last night after Senate lawmakers cleared a major hurdle toward
potentially ending the historic government shutdown. Right now, the Dow
is up nearly three tenths of one percent, or one
(20:22):
hundred and twenty six points. S and P five hundred
up one point one percent or seventy nine points higher,
Nasdaq up just over two percent higher four hundred and
sixty six points, RUSSED two thousand, up eight percent. Tenure
Treasury yield is currently up one basis point at four
point one zero four percent. In crude oil dipping into
(20:46):
negative territory training at fifty nine dollars and sixty seven
cents a barrel, well after initially opening the day higher.
Airline stocks, including American United and Delta Airlines, are now
dipping into negative territory. Meanwhile, Taiwan Semiconductor saw its sales
climb last month at the slowest pace since February twenty
twenty four, but remained in double digits, that stock rising
(21:09):
by three percent. Elsewhere, drugmaker Pfizer agreed to buy weight
loss startup met Sarah in a deal that could be
worth more than ten billion dollars. Met Sarah's stock is
falling fifteen percent, while Pfizer shares are down about half
eight percent. Shares in video sharing platform Rumble surging nearly
ten percent after the company secured at one hundred million
(21:31):
dollar advertising commitment from Tether, while also announcing the deal
to buy German AI firm Northern Data for about seven
hundred and sixty seven million dollars. In Stackhart edging higher
after the grocery delivery company posted stronger than expected quarterly
results after its eleven percent tumble last week over high
valuation concerns. Pall Andeer shares rebounding eight percent today and
(21:55):
after today's closing bell, we'll see earnings from Core Weave
and oxid Dental Petroleum. I'm Tucker Silva, and that is
Wall Street Watch.
Speaker 3 (22:06):
Okay, let's get to earnings. I have some other things
that are on my mind, but let's talk a little
bit a bit about earnings, just because I did tease it.
So we're through ninety one percent of corporate earning season
for the S and P five hundred, and according to
fact Set, who is a data aggregator, ninety percent of
those companies have reported, and the year over year earnings
(22:27):
growth rate for the S and P five hundred and
thirteen point one percent, which is pretty darn toutin like
that is solid. Despite that the S and P five
hundred has risen one point three percent since the kickoff
of earning season, what gives Paul?
Speaker 4 (22:44):
Ultimately, it's to me, it's evaluation story. You had a
market that has run up significantly this year, and while
using ratios like price to earnings and you know, press
to booker press the sales, they're not great short term predictors.
It does seem like that the reaction from investors and
analysts out there is when you see these types of
(23:07):
earnings numbers that we're seeing for Q three it was
more and this is quoting directly from the Wall Street
Journal piece, a sigh of relief than actually a positive
surprise that provides more upward mobility to some of these stocks.
We've talked about it a lot on this program before,
but whatever valuation metric you want to look at, stocks
(23:28):
are really pricey right now. And the numbers that we're
seeing here in the current quarter earning season being reported
because we've seen such a run up this year in
terms of stock growth and valuations of the tech companies,
it's really just almost hey, few they they actually are growing,
rather than oh, this is tremendous, the stock value should
(23:49):
increase even more. It's sort of my short takeaway.
Speaker 3 (23:53):
When we look at the S and P five hundred
and this is I want to look at this in
two different areas. First, talk about just profit growth, so
if you will get year over your profit growth, and
I have this broken out by industry, No surprise, tech
has the greatest profit growth out of any of the
eleven S and P five hundred sectors for this quarter
twenty seven point one percent profit growth, which is I
(24:16):
believe the technical term is enfuego. It's good financials with
all the trading that's going on, all the M and
A activity, this and that of twenty three percent as
far as their earnings, utilities twenty three point two percent.
Kind of surprising. But then when you think about all
these data centers and this and that and gee, like,
if you're an American who's kind of upset about your
(24:36):
electricity price, you're sitting there going like, oh, utilities, you know,
their earnings were twenty three percent year over year, Man,
so did my electric bill?
Speaker 2 (24:43):
That doesn't feel so hot.
Speaker 3 (24:45):
Granted the average electric bill is not up that much,
but you're still kind of like, like, what gives materials
earnings up twenty percent year over year, industrials up fifteen.
Then you get to the ones that are moving more slowly,
consumer discretionary up e eight percent. Now, remember when we
talk about consumer discretionary, the companies that have an outsize
(25:06):
impact there are Amazon and Tesla, So you know you
do have to worry about like what concentration in some
of these sectors tells you. Real estate earnings up six
point one percent, healthcare five point two, consumer staples down
point one percent, energy down half a percent, communication services
down seven point one These are the earnings year over year.
(25:28):
So you look at this and you're like, okay, it's
again no surprise, like tech's been what's been growing fastest,
and you get it there. The piece that is really
interesting to me is what's going on in terms of
revenue growth because obviously, look, tech revenue is up fifteen
point four percent year over year. It's the fastest growing
(25:49):
even by revenue. Healthcare is next to ten point three.
But remember healthcare profits only grew at five point two
percent year over year, so there's, you know, a margin
issue that's happening there. Communications services revenue up ten point
one percent. Remember earnings were down. There's there's a problem there,
but really it's specific to Amazon and just how some
things were realized. Financial is up nine point four percent
(26:10):
for revenue, and everything else is basically up one to
seven and a half percent revenue wise. So you look
at the story here and it's basically for tech and
financials and utilities, margins are expanding and revenue is growing
just fine. For everything else, revenue is growing, but margins
(26:33):
are feeling some pressure there. And this gets it what
we're seeing today in markets, specifically in my opinion, which
is look you've got the idea that hey, the US
government's going to reopen, and so you've got, you know,
this exuberance that's going forth right now in markets today,
S and P five hundred is up one point oh
seven percent, like okay, like you know, the US is back, baby,
(26:57):
Like we're back. The S and P five hundred equal
weight is actually down point one five percent right now.
Investors might want to own US stocks, but they don't
want to own the US economy. Like that's the message
(27:18):
that I get from today. They want to buy tech
and all that stuff. Investors are not interested in staples,
real estate, energy, industrials, all that stuff that actually makes
the economy work. They don't want to own. And by
the way, if you go and take a look this
year at what's going on in markets aside from you know, utilities,
(27:43):
which is the outlier because of its you know, data
center adjacent position that it runs. In energy this year
up about seven percent, lagging the broader index. Real estate
up three percent, lagging the broader index, Consumer staples down
half a percent, materials up the three percent, healthcare OP seven,
consumer discretionary of five, like the stuff that actually makes
(28:06):
the economy hum isn't humming in the market this.
Speaker 4 (28:10):
Year, Paul, relative to what you know, the tech sector
and some of the other big performance.
Speaker 3 (28:15):
Yeah, the stuff that's cranking again this year, it is
tech communication services, which is really basically.
Speaker 4 (28:20):
Amazon and Google.
Speaker 3 (28:22):
Uh. And then you've got utilities, which is again adjacent.
We've talked about that and why that's the case, and
so you kind of look at it, it's like, yeah, like
even even the stock market is kind of k shaped, right.
Speaker 4 (28:37):
Yeah, that's a fair assessment.
Speaker 3 (28:39):
You know, like even the stock market, you got tech
and all this stuff flying, and the other half of
stuff is just kind of treading water up very modestly.
And I think it's pretty representative of what we're seeing
this year broadly in the economy. To take a quick break,
when we come back, President Trump over the weekend put
out a social media post saying that he wanted to
(29:00):
make two thousand dollars payments from tariff revenue to individuals.
We will discuss after.
Speaker 1 (29:07):
This breaking business news as it happens only here on
the Financial Exchange Radio Network. The Financial Exchange streams live
on YouTube. Like our page and stay up to date
on breaking business news all morning long. This is the
Financial Exchange Radio Network.
Speaker 3 (29:38):
All Right, so over the weekend, President Trump posted on
truth Social quote people that are against tariffs are fools.
We're now the richest most respected country in the world
with almost no inflation and a record stock market price.
A dividend of at least two thousand dollars a person,
not including high income people, will be paid to everyone.
(29:59):
So this is obviously like we're getting back to stimulus
checks now for the economy, which again, now I'm really
starting to feel like we're back in like twenty twenty one. Now.
I mean, it's just, you know, give me a little
bit of deja vu here on this. And here's the thing.
If you take in two hundred billion dollars in tariff
(30:22):
revenue and then pay out two thousand dollars to one
hundred million people, you effectively have not made any net
revenue change to the federal government. On top of this,
if you continue to you know, run six to eight
percent annual deficits, you continue to you know, grow the
deficit year over year, both relative to GDP and in
(30:45):
you know, nominal terms. And so I think, a, I'm
really just not sure that there's a ton of appetite
out there right now for two thousand dollars stimulus checks
to be like handed out. I just don't know. And
I think the other piece is, Okay, if all the
tariff revenue is just going to end up being taken
(31:07):
and given back to people, then what did we actually.
Speaker 2 (31:14):
Do here?
Speaker 4 (31:17):
I'm right with you. It seems like you have a
couple risks that could come from this one potentially creating
kind of more inflationary pressure by giving one hundred million people.
Did you just ballpark that number because it's just it
was yeah, because it was unclear. It just said like
no high incomers. But I wasn't sure if there had
been a number sort of projected out there. But yeah,
(31:38):
that hypothetically that same exercise, you're putting two thousand dollars
in everyone's pocket. We know what happened last time with
the COVID stimulus checks. Those certainly allowed for a lot
of people to spend more freely than they would have normally.
So that's one aspect of things. And the second impact
impact is my view on terrorists, if they could go
down to pay down some of our debt, that to
(32:00):
me would be encouraging. It's something that certainly I could
get behind. From a fiscal monetary perspective, you could argue
as to how much of a deen it makes when
you're running six to eight percent deficit each year and
it's two trillion dollars, But hey, two to three hundred
billion to pay that off is better than nothing. I
would like that more so to go into that direction
than a stimulative effort to individuals out there.
Speaker 3 (32:22):
No one wants to be serious about the deficit. Yeah,
it's been like the last time anyone was serious about
the deficit. You got to go back almost thirty years.
I mean you're talking nineteen eighties, nineteen nineties, when again
members of both parties voted against kind of like their
own like platforms and interests. People forget like Reagan raised taxes,
(32:44):
Bush One raised taxes, Clinton cut spending. Those are not
normal things from the respective parties that you're talking either side. Yeah,
and they ultimately did it because they know it was
the right thing to do. Now it's just well, you know,
here's you know, the this and spend on that and
cut this and cut It's like, okay, Like the reason
(33:05):
why we're here is because no one wants to do
the hard stuff. And until proven otherwise, that's kind of
the case.
Speaker 5 (33:12):
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(34:20):
That's visit USBI dot com.
Speaker 3 (34:24):
I got a bone to pick with Google.
Speaker 2 (34:26):
Oh yesterday, at four seventeen pm Eastern time, I received
an email from YouTube TV, who is owned by Google.
Speaker 3 (34:40):
In case you didn't know, Hi, Chuck, who they know
my name?
Speaker 4 (34:45):
Wow?
Speaker 3 (34:47):
Wonderful they spelled it right too. We have been working
in good faith to negotiate a deal with Disney that
pays them fairly for their content and returns their programming.
Speaker 2 (34:55):
To YouTube TV.
Speaker 4 (34:56):
Good for you.
Speaker 3 (34:57):
We know it's been disappointing to lose Disney content. We
want you to know that we deeply appreciate your patience.
Oh thanks, put me on hold. In light of the disruption,
we're offering our subscribers to twenty dollar credit. It's great. Like,
I'm just I'm gonna get twenty dollars off my next bill.
Over the next few days, you will receive a follow
up email with instructions for how to redeem your twenty
dollars credit for YouTube TV. So you bunched like greedy
(35:22):
little like gremlins.
Speaker 4 (35:24):
Like, what the heck?
Speaker 2 (35:25):
You say?
Speaker 3 (35:26):
You want to give me a credit? But I got
to freaking opt into the credit. That's right, because you
just want to be like, oh, someone out there isn't
gonna figure out how to probably because hey, maybe they're
not the most tech savvy and maybe their kids set
this up for them, and so they're gonna miss out
on the twenty dollars credit because you need that twenty
dollars to fund some data center of your buildings that's
(35:47):
gonna eat all of our electricity and water. So, like,
my goodness, now here's the thing. To anyone listening who
subscribes to YouTube TV. Go onto TV dot YouTube dot com,
click on your like sign in, and then go to
the settings menu. It's in the top right.
Speaker 5 (36:04):
Somebody steps already exactly, it's in the top right.
Speaker 3 (36:06):
Then once you're in the settings, men, you click on
the updates selection and then you can redeem your credit there.
Speaker 5 (36:12):
Like that's simple, But to go through all those steps
is aggravating it. A lot of people are just gonna
punt on.
Speaker 3 (36:18):
Google's gonna end up making millions of dollars because they
made the like credit claiming process too difficult. So like
this again. It sometimes I like when we talk about like,
you know, greedflation in this and that, I like to
poo pooh because I'm like Look, greed didn't cause inflation.
Companies are always greedy, and like there's not always you know,
(36:38):
high inflation. But when someone says, hey, we're not giving
you the product you signed up for and we want
to give you a credit, and then they make you
go through like a four menu screen to go and
authorize the credit, that's greedy and it sucks, and yeah,
just do it. I don't like it. Just Just give
me the freaking credits.
Speaker 5 (36:59):
Just discount everybody you know, like I to it.
Speaker 2 (37:03):
I just don't get it.
Speaker 4 (37:05):
Not everyone's gonna want that Zucker they got hopped in.
Speaker 3 (37:08):
This is where you get like the social media influencers.
I was born tough and that's why not only did
I opt out, I emailed YouTube to see if they
charged me twenty dollars extra this month.
Speaker 4 (37:18):
So they're pushing back against Disney and all the channels
that go underneath that in terms of what they want
to charge in the upcoming cycle to be on YouTube TV. Basically,
they're they're claiming it.
Speaker 3 (37:29):
Look, they can fight it out, like it's fine, Like
I understand it, Like I don't have a problem there.
But if you're gonna say, hey, you're not getting the
product that you signed up for, and here's a credit.
Don't make me sign up for the credit.
Speaker 4 (37:40):
You don't.
Speaker 2 (37:41):
You don't make me.
Speaker 3 (37:41):
Sign up for YouTube tv every month, right because you
want the recurring subscription revenue. So don't make me sign
up for the credit. Just give me the freaking twenty dollars,
you greedy little like like Gerbils, Like what are you doing?
You people?
Speaker 4 (37:59):
So no money, no foot for you tonight. Basically unless
they get during the day, bed.
Speaker 3 (38:03):
Before then anyways, unless it's the pats like I do
not make it past eight thirty. So it's it's fine.
Speaker 4 (38:08):
But they're number four now, they got ten million subscribers
YouTube They're they're pretty serious player YouTube TV.
Speaker 5 (38:13):
They're not tiny, Yeah, Tucker, we supposed to have some,
but there it is. Nope, Yeah, they're it's just you know,
being stupid.
Speaker 4 (38:19):
Okay, got it.
Speaker 3 (38:20):
I thought we were done. We're gonna take a quick break.
Now we're done for the hour and we'll be back
Speaker 2 (38:26):
In just a bit.
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